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The main problem on Augur right now is volume. Only a few markets have orders to trade against, and it seems like the cryptocurrency markets are the most active

The main problem on Augur right now is volume. Only a few markets have orders to trade against, and it seems like the cryptocurrency markets are the most actively used. I tried to use the platform to make a small bet against Tesla, but obviously you need someone to take the other side of the bet. Still a very cool platform. A lot of people use predictions.global to get a birds eye view of the markets. https://predictions.global/ https://predictions.global/ And the Discord channel is always busy. The mods there are very responsive. https://discordapp.com/invite/faud6Fx https://discordapp.com/invite/faud6Fx

dminor 8y ago
I wonder if the creators were aware of Robin Hanson's market maker mechanism, in which an automated market maker always accepts a trade. It limits its potential losses by offering increasingly worse terms as the market deviates from even chance of the outcome. It also allows different predictions to be linked, so that you can bet on the outcomes of two events, or on the outcome of one event given a particular outcome of another event.
- otoburb 8y ago
  They knew of Robin Hanson's work around futarchy[1], and interviewed him[2]. Augur initially planned to implement an automated market making scoring mechanism, but changed the dynamics[3] during alpha testing. [1] https://en.wikipedia.org/wiki/Futarchy https://en.wikipedia.org/wiki/Futarchy [2] http://augur.strikingly.com/blog/augur-advisor-chat-with-dr-robin-hanson-case-study-overviews http://augur.strikingly.com/blog/augur-advisor-chat-with-dr-... [3] https://augur.stackexchange.com/questions/104/why-did-augur-decide-to-move-away-from-an-automated-market-maker https://augur.stackexchange.com/questions/104/why-did-augur-...
sorokod 8y ago
The main problem on Augur right now is volume I think that the relevant term is liquidity
- MusaTheRedGuard 8y ago
  See this reddit thread: https://www.reddit.com/r/Augur/comments/97di7x/is_there_a_way_to_close_out_positions_in_an/ https://www.reddit.com/r/Augur/comments/97di7x/is_there_a_wa...
0xdeadbeefbabe 8y ago
> but obviously you need someone to take the other side of the bet. Wasn't obvious to me. Can't a prediction stand alone, as in real life?
- miketery 8y ago
  Not if you don't have skin in the game. The associated risk and payout equilibrium becomes the prediction. Without skin in the game you end up with manipulated values.
drcode 8y ago
I think the "volume" problem breaks further into two critical sub-questions: 1. A big selling point of these markets is that there are theoretical commercial value to predictions- i.e. a company could get information of the likely success of their new product line ahead of time, to help them make strategic adjustments. However, Robin Hansen (one of the top economists working on betting markets) says, counterintuitively, that industries have been very luke warm about actually doing this in reality, for various psychological and economic reasons (he got into this in his econtalk interview I think) 2. Suppose bets on Augur start ramping up- How do we know these are real bets from real customers? The Augur company has immense funds on hand and its easy on blockchains to simulate fake volume through anonymous accounts. I have no reason to doubt the ethics of the Augur team, but it's unfortunate that if their marketplace starts taking off that it'll be so hard to tell how organic the growth is.
- berberous 8y ago
  Why is 2 a problem? I'd love to use Augur, but the liquidity is low. If the Augur team wants to seed it with liquidity and good bets, I'm game to take the other side. This is also how many startups start out -- for example, the Reddit cofounders faked a lot of usage and self-submitted posts in order to get early traction.
  - drcode 8y ago
    Sure, it's fine for them to be market makers, if they're transparent about it.
- gwern 8y ago
  The Augur Foundation will never do that because it would put them in immense legal jeopardy from the SEC/CFTC, and at no point in Augur's growth would that make sense: when Augur is small, the gain from wash trading is much smaller than the potential fines (Intrade was fined $3m this year alone, and it doesn't even operate any more), and when it's large, it's unnecessary.

dminor 8y ago

I wonder if the creators were aware of Robin Hanson's market maker mechanism, in which an automated market maker always accepts a trade. It limits its potential losses by offering increasingly worse terms as the market deviates from even chance of the outcome. It also allows different predictions to be linked, so that you can bet on the outcomes of two events, or on the outcome of one event given a particular outcome of another event.

otoburb 8y ago
They knew of Robin Hanson's work around futarchy[1], and interviewed him[2]. Augur initially planned to implement an automated market making scoring mechanism, but changed the dynamics[3] during alpha testing. [1] https://en.wikipedia.org/wiki/Futarchy https://en.wikipedia.org/wiki/Futarchy [2] http://augur.strikingly.com/blog/augur-advisor-chat-with-dr-robin-hanson-case-study-overviews http://augur.strikingly.com/blog/augur-advisor-chat-with-dr-... [3] https://augur.stackexchange.com/questions/104/why-did-augur-decide-to-move-away-from-an-automated-market-maker https://augur.stackexchange.com/questions/104/why-did-augur-...

sorokod 8y ago

The main problem on Augur right now is volume I think that the relevant term is liquidity

MusaTheRedGuard 8y ago
See this reddit thread: https://www.reddit.com/r/Augur/comments/97di7x/is_there_a_way_to_close_out_positions_in_an/ https://www.reddit.com/r/Augur/comments/97di7x/is_there_a_wa...

0xdeadbeefbabe 8y ago

> but obviously you need someone to take the other side of the bet. Wasn't obvious to me. Can't a prediction stand alone, as in real life?

miketery 8y ago
Not if you don't have skin in the game. The associated risk and payout equilibrium becomes the prediction. Without skin in the game you end up with manipulated values.

drcode 8y ago

I think the "volume" problem breaks further into two critical sub-questions: 1. A big selling point of these markets is that there are theoretical commercial value to predictions- i.e. a company could get information of the likely success of their new product line ahead of time, to help them make strategic adjustments. However, Robin Hansen (one of the top economists working on betting markets) says, counterintuitively, that industries have been very luke warm about actually doing this in reality, for various psychological and economic reasons (he got into this in his econtalk interview I think) 2. Suppose bets on Augur start ramping up- How do we know these are real bets from real customers? The Augur company has immense funds on hand and its easy on blockchains to simulate fake volume through anonymous accounts. I have no reason to doubt the ethics of the Augur team, but it's unfortunate that if their marketplace starts taking off that it'll be so hard to tell how organic the growth is.

berberous 8y ago
Why is 2 a problem? I'd love to use Augur, but the liquidity is low. If the Augur team wants to seed it with liquidity and good bets, I'm game to take the other side. This is also how many startups start out -- for example, the Reddit cofounders faked a lot of usage and self-submitted posts in order to get early traction.
- drcode 8y ago
  Sure, it's fine for them to be market makers, if they're transparent about it.
gwern 8y ago
The Augur Foundation will never do that because it would put them in immense legal jeopardy from the SEC/CFTC, and at no point in Augur's growth would that make sense: when Augur is small, the gain from wash trading is much smaller than the potential fines (Intrade was fined $3m this year alone, and it doesn't even operate any more), and when it's large, it's unnecessary.